Donald Trump, the U.S. president, is seeing the AI data center project 'Stargate' announced in collaboration with chatbot GPT creator OpenAI, Japan's SoftBank, and American software giant Oracle, aimed at achieving the U.S.'s 'artificial intelligence (AI) supremacy', wobble just six months after its launch.
On Jan. 21, when Trump's second administration was inaugurated, President Trump, OpenAI CEO Sam Altman, and SoftBank Chairman Masayoshi Son (Korean name Son Jeong-ui) announced plans to invest a total of $500 billion (about 690 trillion won) by 2029 to build a massive AI data center infrastructure and create 100,000 jobs. At the time, the three parties pledged to immediately inject $100 billion (about 135 trillion won), but over six months later, no construction contracts for the AI data centers have been secured.
The reason the Stargate project has made no progress for half a year is that CEO Altman and Chairman Son are reportedly at odds over key conditions, including the site for the data center, according to multiple sources cited by The Wall Street Journal (WSJ) on the 21st (local time). According to one source, the two sides are in conflict over how much data center they will build on the lot owned by SB Energy, an energy developer supported by SoftBank.
Plans to invest $100 billion this year to secure data centers have also hit a snag. WSJ reported, 'The ambitious data center investment plans of the three companies have been scaled back to just constructing a small data center in Ohio by the end of this year.'
The fact that CEO Altman is using the Stargate name for data center contracts that OpenAI is independently entering into is also believed to be a factor fueling conflicts with Chairman Son. While Chairman Son is the chair of the Stargate board and holds the trademark rights, OpenAI is reportedly referring to contracts for data centers in Abilene and Denton, Texas, not associated with SoftBank, as part of the Stargate project.
Chairman Son decided to invest $30 billion (about 41 trillion won) in OpenAI at the beginning of the year, accepting asset sales and new liabilities. This investment is associated with the Stargate project and is considered the largest single investment in startup history. WSJ noted, 'SoftBank invested in OpenAI as a latecomer in the AI field, but the delay in Stargate has disrupted Chairman Son's AI ambitions.'
However, Safra Catz, Oracle CEO, remarked during an investor conference call last month that 'Stargate has not yet been concretized,' lending weight to the project delay claims. WSJ also reported that the investment scale for Oracle and the UAE technology fund MGX, named as partners at the time of the Stargate project announcement, has not yet been determined.
Nevertheless, OpenAI and SoftBank maintain that the Stargate project is progressing smoothly. The two companies recently issued a joint statement saying, 'We are advancing the project in various states in the U.S. and are rapidly moving forward with the construction of the AI data center infrastructure.'
However, OpenAI, which needs to secure AI data centers to operate the next-generation AI model immediately, is independently entering into data center contracts without SoftBank's involvement. Earlier this month, OpenAI signed a contract to additionally lease a data center with a capacity of 4.5 GW (gigawatts) with Oracle, in which SoftBank did not participate.
Having triggered an AI boom in 2022 with ChatGPT, OpenAI is facing crises as it encounters recurring obstacles. Conflicts with its largest investor, Microsoft (MS), are deepening, and the recruitment competition from rival companies has led to the loss of over ten key researchers. The launch of the next-generation model GPT-5 is also being continuously delayed. OpenAI is currently pushing for a transition to a public corporation (PBC) through a governance overhaul, but negotiations are facing difficulties as MS demands more equity and exclusive rights.
The deterioration of relations with MS is also a factor negatively impacting OpenAI's external funding efforts. SoftBank announced in March that it would invest $40 billion in OpenAI, with $10 billion being advanced in April. The remaining $30 billion is conditioned on OpenAI completing its transition to a PBC by early next year. If an accord with MS is not reached and the transition fails, OpenAI will not receive the $30 billion investment. A tech industry insider noted, 'OpenAI is growing rapidly, but it continues to record losses, requiring constant external capital injections for business expansion.'
Investment bank JPMorgan, in a note to investors released the previous day, analyzed, 'OpenAI's annual recurring revenue is expected to grow from $10 billion this year to around 1.74 trillion won by 2030, but it seems unlikely to turn a profit by that time,' adding that 'during that time, the risks of intensified competition in the AI industry and increased expenses may put investors' expectations to the test.'